020 7898 0500Sterling ended last week on the back foot after the BoE voted 6-2 to hold interest rates at the ‘Super Thursday’ meeting. This represented a step back away from a possible rate rise and confidence in sterling slipped. Following this, Governor Mark Carney warned that uncertainty over Brexit is already weighing on the economy and cut growth forecast down to 1.7% from its previous forecast of 1.9% made in May.
In addition, employment data from the US was positive, which ended up compounding sterling’s woes. The big question mark will be on whether this trend will continue into this week. With uncertainty playing an increasingly bigger role in sterling fluctuations the currency will remain vulnerable.
It is a relatively quiet week ahead, with the midsummer lull seemingly underway. The main UK focus will be on June figures for both the trade balance, forecast at a deficit of -£3.6 billion, and manufacturing production (0.5% growth) which are due on Thursday. We also have the release of the BRC retail sales monitor on Tuesday, which is an early guide to July retail sales. This will be followed by the RICS housing survey on Thursday.
